Sturges v. Bridgman

11 C.D. 852 (1879)

The Plaintiff in this case was a physician. In the year 1865 he purchased the lease of a house in Wimpole Street, London, which he occupied as his professional residence.

Wimpole Street runs north and south, and is crossed at right angles by Wigmore Street. The Plaintiff's house was on the west side of Wimpole Street, and was the second house from the north side of Wigmore Street. Behind the house was a garden, and in 1873 the Plaintiff erected a consulting-room at the end of his garden.

The Defendant was a confectioner in large business in Wigmore Street. His house was on the north side of Wigmore Street and his kitchen was at the back of his house, and stood on ground which was formerly a garden and abutted on the portion of the Plaintiff's consulting-room on which he built the consulting room. So that there was nothing between the Plaintiff's consulting-room and the Defendant's kitchen but the party-wall. The Defendant had in his kitchen two large marble mortars set in brickwork built up to and against the party-wall which separated his kitchen from the Plaintiff s consulting-room, and worked by two large wooden pestles held in an upright position by horizontal bearers fixed into the party-wall. Those mortars were used for breaking up and pounding loaf-sugar and other hard substances, and for pounding meat.

The Plaintiff alleged that when the Defendant's pestles and mortars were being used the noise and vibration thereby caused were very great, and were heard and felt in the Plaintiff's consulting-room, and such noise and vibration seriously annoyed and disturbed the Plaintiff, and materially interfered with him in the practice of his profession. In particular the Plaintiff stated that the noise prevented him from examining his patients by auscultation for diseases of the chest. He also found it impossible to engage with effect in any occupation which required thought and attention.

The use of the pestles and mortars varied with the pressure of the Defendant's business, but they were generally used between the hours of 10 a.m. and 1 p.m.

The Plaintiff made several complaints of the annoyance, and ultimately brought this action, in which he claimed an injunction to restrain the Defendant from using the pestles and mortars in such manner as to cause him annoyance.

The defendant stated in his defense that he and his father had used one of the pestles and mortars in the same place and to the same extent as now for more than sixty years, and that he had used the second pestle and mortar in the same place and to the same extent as now for more than twenty-six years. He alleged that if the Plaintiff had built his consulting-room with a separate wall, and not against the wall of the Defendant's kitchen, he would not have experienced any noise or vibration, and he denied that the plaintiff suffered any serious annoyance, and pleaded a prescriptive right to use the pestles and mortars under the [appropriate articles of English law]. Issue was joined, and both parties went into evidence. The result of the evidence was that existence of the nuisance was, in the opinion of the court, sufficiently proved; and it also appeared that no material inconvenience had been felt by the plaintiff until he built his consulting room...

Transactions Costs and the Efficiency of Alternative Remedies Scenario 1 (Assume it costs $300 to move Bridgman's equipment)

No Move Move Bridgman $1,000 $700

Sturges $500 $1,200 No move is the status quo -> moving equipment results in a cooperative surplus of $____??______

The court has three options with respect to how it rules:

1) Do nothing, which gives the property right to defendant 2) Order an injunction, which gives the right to the plaintiff 3) Order the defendant to pay damages to the plaintiff(make defendant purchase the right)

Possible outcomes

TC Low Ruling 1: Sturges will pay Bridgman to move equipment, which is efficient B = $1,200

S = $700 (=1200-300-200)

TC Low Ruling 2: B will move equipment, which is efficient B = $700

S = $1,200

TC Low Ruling 3: Damages = $700, so B will simply move equipment, which is efficient B = $700

S = $1,200

TC high Ruling 1: No move of equipment, which is inefficient B= $1000

S= $500

TC high Ruling 2: Same as low TC, efficient B = $700

S = $1,200

TC high Ruling 3 Same as low TC, efficient B = $700

S = $1,200

Scenario One:

The status quo is that there is no moving of equipment. This status quo has Bridgman with $1000 and Sturges with $500. If the equipment gets moved, it costs Bridgman $300 to do so. The resulting outcomes after the equipment is moved are $700 for Bridgman and $1200 for Sturges.

In the case where the TC are low and the property rule is to do nothing (which gives the property right to the defendant), Bridgman is under no compulsion to move his equipment nor any requirement to pay Sturges for the damage. Bridgman would have no reason to move his equipment under this rule. But for Sturges, he would gain $700 (the $1200 value minus the $500 value)a and the move would only cost $300. This means that Sturges could afford to pay Bridgman any amount between $300 and $699.99 to move the equipment and still be better off. (He's better off by the 700 minus whatever he pays.) Often in these situations we will consider the outcome to be "reasonable" when they split the difference. This means that Sturges would pay Bridgman $300 (moving costs) plus $200 (splitting the difference) or $500 total. Bridgman would have his $700 from the move column plus the $500 from Sturges for a total of $1200. Sturges would have $700 total, the $1200 from the move column minus the $500 he paid to Bridgman. This ruling is efficient because its more valuable to both parties for the equipment to be moved.

When the transaction costs are high, then Sturges and Bridgman can't bargain and so Sturges can't pay Bridgman to move the equipment. Because Bridgman has no incentive himself to move the equipment because of the ruling, he won't move it. They will end up at the No Move column and Bridgman will have $1000 and Sturges will have $500. This is inefficient because there is a cooperative surplus that could be gained by moving to the Move column. The high transaction costs stopped the efficient outcome.

Use the logic like I've given about and think about how rulings 2 and 3 will work. Then try Scenario 2. In this scenario, the status quo is that there is no moving of equipment. This status quo has Bridgman with $1000 and Sturges with $500. If the equipment gets moved, it costs Bridgman $300 to do so. The resulting outcomes after the equipment is moved are $700 for Bridgman and $700 for Sturges. Repeat the analysis above and what you did for scenario 1 for these new numbers.(Assume even splits of any surpluses.)

Scenario 2 (Assume it costs $300 to move Bridgman's equipment)

No Move Move Bridgman $1,000 $700

Sturges $500 $700 No move is the status quo -> moving equipment results in a cooperative surplus of $__??_____

The court has the same three options:

Possible outcomes

TC high Ruling 1: choose one option

• ~Bridgman moves equipment on his own
• ~Sturges pays Bridgman to move equipment
• ~Bridgman pays Sturges to not move equipment
• ~Bridgman decides not to move equipment and it doesn't get moved

2. Is this outcome efficient?

3. B=$______

4. S=$______

TC high Ruling 2:choose one option

• ~Bridgman pays Sturges to not move equipment
• ~Sturges pays Bridgman to move equipment
• ~Bridgman moves equipment on his own
• ~Bridgman decides not to move equipment and it doesn't get moved

2. Is this outcome efficient?

3. B=$______

4. S=$______

TC high Ruling 3: choose one option

• ~Bridgman pays Sturges to not move equipment
• ~Bridgman moves equipment on his own
• ~Bridgman decides not to move equipment and it doesn't get moved
• ~Sturges pays Bridgman to move equipment

2. Is this outcome efficient?

3. B=$______

4. S=$______